After explaining in detail the object of his visit he made two propositions in writing (see copy annexed), to both of which I acceded.

He called my attention especially to his correspondence with General Butler in October last relative to prisoners of the Eighth Vermont Regiment captured by General Taylor and assured me he had endeavored to carry out the provisions of the cartel and also the particular request of General Butler as to delivery of prisoners, as the correspondence will show.

He regretted that any misunderstanding had arisen regarding Brigadier-General Clark and his fellow-prisoners and assured me the prisoners detained by the Confederate Government in consequence of such misunderstanding should be immediately delivered to General Grant on the fulfillment of the arrangement entered into between us.

I called his attention to the matter of shooting a number of Federal prisoners of war some months since and for which General Butler revoked the parole of the prisoners taken by General Weitzel in La Fourche.

He explained by declaring it the act of the State authorities and not of the Confederate Government, but denounced it as an outrage and unjustifiable and assured me that President Davis looked upon it in like manner. He also said that although the act was one of war and committed by State officers it must be assumed by the Government as its own act, and he had no doubt if the mater was properly presented as a grievance explanation and prompt disavowal would be rendered. He had discussed the matter personally with the President and did not hesitate from opinions advanced by him at that time to express the opinion above mentioned.

I also called his attention to the fact Federal prisoners were still held in Texas and had been since the commencement of the war. He answered promptly that he would correct that matter immediately, and thereupon proposed to proceed to Galveston for the purpose of having a conference with General Magruder, and pledged his honor to do everything in his power to have all the prisoners in Texas delivered at the earliest possible moment to the Federal authorities; said that many taken in the early part of the war were not at present in custody of the Confederate authorities, some having been paroled, others escaped; he would, however, do his best to gather them together and forward them to Galveston.

Copies of the correspondence annexed. All of which is respectfully submitted.

JOHN S. CLARK,

Colonel and Aide-de-Camp.

[Inclosure Numbers 1.]

NEW ORLEANS, February 6, 1863.

Colonel JOHN S. CLARK, U. S. Army, New Orleans.

COLONEL: I will meet you on the 21st instant for the purpose of receiving Brigadier-General Clark and any other prisoners your Government may chose to deliver to me. At which time if it meets the sanction of your Government I will either in person or by an authorized agent proceed to Texas to carry out the cartel to its fullest extent as regards all prisoners taken before the 23rd of January, 1863, and will in accordance with the President's proclamation carry out the cartel.

Respectfully, your obedient servant,

N. G. WATTS,

Major and Agent for Exchange of Prisoners at Vicksburg.